Solvency II delays could have knock-on effect

Delays in the regulatory process could hamper the efforts of organisations to conform to Solvency II, according to industry experts.

Level Two proposals were supposed to have been tabled by the European Commission for parliament and council by June this year. But because of Omnibus II, they will probably not be ready until January 2012.

“The problem is that Omnibus II amends the Level One text, and so the Commission can only propose Level Two implementing measures after the Level One text is finalised,” says Yannis Pitaras, head of prudential regulation, Comité Européen des Assurances (CEA).

“The Commission will not be able to formally propose Level Two measures until after Omnibus II is adopted. That means that the Commission is probably only going to be able to propose Level Two measures after January 2012. This is a concern for us, because it doesn’t leave enough time for companies to prepare. We need the certainty of what Levels One, Two—and to a certain extent, Three—would look like before they begin preparing for entry into Solvency II.

“That means that there is a timing issue because of Omnibus II, and it is becoming an increasing concern for the industry. So we want certainty—we need to know what Levels One, Two and Three will be about as soon as possible to enable us to prepare, but at the same time, we want a proper consultation around Level Two and Level Three as well, so that ultimately they are provisions which make sense.”